10 Asian unicorns in MIT list of the world’s 50 smartest companies

Indian ecommerce leader Flipkart and seven Chinese unicorns – including the BAT trio of Baidu, Alibaba, and Tencent – figure in this year’s MIT Technology Review list of the 50 smartest companies in the world. Two Taiwanese companies complete the contingent of 10 from Asia in the annual list, which is curated by the editors of the 118-year-old magazine published by the Massachusetts Institute of Technology.

The editors identify companies that have been “smart” in creating new opportunities in the preceding 12 months. By “smart”, they mean companies that best combine innovative technology with an effective business model.

While the BAT trio figured in last year’s list too, the four others from China, two from Taiwan, and Flipkart from India are new entrants. Surprisingly, there are no companies from Asia’s technologically advanced nations like Japan, South Korea, and Singapore.

Two African companies – internet platform Jumia and pay-as-you-go solar power provider M-Kopa – as well as Latin America’s largest online marketplace MercadoLibre make the cut, underlining the weightage given to business opportunity.

Here are the 10 companies picked from Asia, and the reasons for their inclusion:

Flipkart: battling back against Amazon

India’s ecommerce leader had a tough time in 2016, as global rival Amazon came hard at it with US$5 billion earmarked for winning this large, emerging market. But Flipkart managed to hold its ground, and finally landed a US$1.4 billion funding round from Tencent, Microsoft, and eBay early this year at a valuation of US$11.6 billion. Flipkart’s main Indian rival Snapdeal, on the other hand, lost market share drastically to Amazon.

Flipkart is now negotiating to buy Snapdeal at less than US$1 billion, a fraction of its peak valuation, to further consolidate India’s competitive ecommerce sector after acquiring eBay India.

“Amazon’s aggressive investments in India have upended the country’s ecommerce industry, but Flipkart keeps battling back,” observes MIT Technology Review, putting the Indian company 36th on the list, above tech giants like IBM, General Electric, and Alibaba.

The most notable among Flipkart’s local innovations is its progressive web app – a website that looks like a mobile app. It’s much lighter in the use of mobile data and works better in places with patchy internet. The Indian company has also been hiring AI experts to improve product recommendations and the customer interface. It is expanding its product range with private labels. And the eBay India acquisition has boosted its cross-border ecommerce.

Baidu: pushing into AI

Baidu suffered a setback with the exit of its Silicon Valley import, Andrew Ng, but continues to invest in AI research despite falling revenue growth. It launched DuerOS, a voice-enabled smart assistant like Amazon Alexa, after acquiring Y Combinator-backed startup Raven Tech.

Baidu leads China’s national AI mission. It also acquired a computer vision startup to bolster its driverless car initiative.

Alibaba: challenging Amazon in cloud services

Alibaba is already the world’s largest ecommerce company with a 57 percent share of the Chinese market and a valuation of US$364 billion. It is now taking on its global rival Amazon in cloud computing services. After initially using it for its own ecommerce and payments, Alibaba started offering its cloud infrastructure as a service to other companies.

Alibaba Cloud is now its fastest growing business, expanding globally with data centers in the US, Europe, Australia, and Asian countries. It uses the cloud to offer big data services as part of its initiative called the “electronic world trade platform” to help small businesses with cross-border ecommerce.

Ant Financial: expanding into global markets

Alibaba spun out Ant Financial as a separate company in 2014 amid rapid expansion of mobile payments arm Alipay. Ant now executes more than half of all mobile payments in China with over 450 million annual active users, although WeChat Pay has grown to be a strong rival. It is also pushing into global markets, investing in fintech companies in India, Singapore, Thailand, and the US.

Ant has been building artificial intelligence into new products, such as an insurance claim product that uses machine learning to process images of accidents taken with a smartphone. The company, which holds billions of dollars in escrow at any given time, has also started offering loans based on creditworthiness assessed from spending patterns.

Tencent: keeps on expanding WeChat features

Tencent’s social networking app WeChat’s model is today cited as often as those of Uber and Airbnb. It’s an all-in-one app with chat, ecommerce, payments, games, music, and videos. Its expanding range pulls in new users and keeps existing ones engaged within the app, helping it to sell ads and services.

WeChat is set to cross a billion monthly active users this year, spending 90 minutes a day on average in the app. Riding on its social network, Tencent has also become the world’s largest video gaming company, which accounts for most of its revenue.

iFlytek: new kid with voice-activated systems

iFlytek makes an impressive debut in the MIT list, flying in at number 6, the highest ranking for an Asian company, two places ahead of Tencent.

iFlytek dominates the Chinese market in the trendy area of voice-activated systems. These are being used in cars, home appliances, and robots. It also has a joint venture to develop educational products with built-in instant translation. It has set up a fund to invest in AI startups around the world to widen its repertoire even more.

iFlytek is based in the city of Hefei, which is growing into a hub for AI research.

Face++: first facial recognition unicorn

At number 11 on the list is Beijing-based Face++, the world’s first unicorn to specialize in facial recognition, after a US$100 million funding round in December.

Face++ analyzes 106 points on a person’s face. Its software is used by Alipay to let users log in with their face as ID. Ride-sharing company Didi Chuxing uses it to identify its drivers, and smartphone app maker Meitu uses it to offer photo-retouching features.

DJI: low-cost, portable drones for all

Photo credit: DJI and Tech in Asia.

Shenzhen-based maker of low-cost, portable drones DJI rounds out the Chinese contingent in the list. Its US$999 Mavic Pro drone can be folded into a backpack and has advanced features to avoid obstacles in flight.

DJI’s “latest drone, the US$499 Spark, fits in the palm of a hand, weighs less than a soda can, and can be controlled with hand gestures,” observes MIT Technology Review. It has a more rugged drone, the Matrice 200, for industrial inspections and search-and-rescue missions. The company had US$1.4 billion in sales in 2016 and expects revenues to exceed US$1 billion this year.

Foxconn: automation with Foxbots

The Taiwanese company is the leader in contract manufacturing of smartphones in China, including iPhones. It is expanding into other markets, with plans to invest US$5 billion into India for a parallel manufacturing hub to that of China. It is also investing in more advanced manufacturing facilities, like a display-making unit in the US.

At the same time, Foxconn is building its own line of robots, to counterbalance rising labor costs. Already, 40,000 Foxbots are at work. The company intends to fully automate the making of PCs, monitors, and smartphones.

HTC: pivoting to VR

The second Taiwanese company in the list is HTC. MIT Technology Review includes it for successfully pivoting from its declining smartphone business into the hot new field of virtual reality (VR).

Its Vive motion-tracking system lets users walk about in a virtual world, instead of just waving their arms and legs. It’s also collaborating with Google to make a standalone VR headset that doesn’t require smartphones. HTC has invested in 60 VR startups globally through its accelerator program, Vive X, to build up content for its VR system.